Companies promising help with mortgage modification and foreclosure relief are proliferating throughout the country as the housing crisis continues. But many of these firms are really fraudulent operations aimed at scamming people who are already in distress.
Here's some tips on how to spot a potential scam, from the National Endowment for Financial Education:
1. Be suspicious of unsolicited mail.
Watch out for letters that look like government forms or bear logos that resemble government seals. Search for misspelled words, language that includes dire warnings and references to government programs you can't access without their help.
2. Carefully inspect Web sites before submitting information.
Some companies have been accused by law enforcement of setting up sites that mimic official government sites, which end with ".gov." Some scams try to confuse consumers by using addresses that include a dash or slash in front of "gov" or end in .us, or by using names that sound like legitimate programs.
3. Search for other red flags.
Sites that contain only a page where you fill out personal information and submit it for a referral should be considered suspect. Also be skeptical about the use of magazine, newspaper and TV logos, which could just mean the company paid for advertising with those outlets. And question promises to do things like put a "team of attorneys" on your case.
4. Walk away from any attempt to collect fees, and promises for a "free consultation" or a "money back guarantee," which advocates say is a tip-off there's going to be a fee. Nonprofit organizations work with government agencies to provide free help for distressed homeowners.
5. Check for complaints against the company with your state consumer affairs or attorney general's office, and with the Better Business Bureau.
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